Family Security Law Group, APC write about estate planning, wills, trusts, durable power of attorney, title and property agreements, special trusts, probate, trust administration and more!

June 2015

06/30/2015

Several Kansas agencies, including The Office of the Kansas Securities Commissioner (KSC), the Kansas Department for Children and Families (DCF) and the Kansas Department for Aging and Disability Services (KDADS) have partnered to recognize World Elder Abuse Awareness Day (WEAAD). WEAAD is presented by the International Network for the Prevention of Elder Abuse and the World Health Organization. The organization, founded in 2006, focuses on raising knowledge and of how people can prevent elder abuse in their communities.

Elder abuse comes in many forms, The Hays (KS) Post explains in a recent article titled “Agencies encourage Kansans to help prevent elder abuse in their communities.” Elder abuse can be physical, financial, emotional, neglect, or abandonment, with several types of abuse often inflicted at the same time. Financial abuse is generally the most common form of abuse to elders, and the cost to victims is estimated at $2.9 billion annually.

Investment fraud is an area of concern because the victims can have their life savings wiped out with little or no opportunity to recover. Investment fraud can come in many forms, the article warns. The investment might be deceptive on its face, or it could be a legitimate product or service that’s unsuitable for the senior’s situation. Other investment problems include unregistered products, outright theft of funds, or products sold by an unlicensed adviser or broker. Investors and caregivers are urged to “investigate before investing” and to call the KSC at (785) 296-3307 to verify if the product and person selling it are legitimate and whether there’ve been any complaints against them.

Studies show that family members and caregivers are guilty of elder abuse in more than half of these cases. Anyone can, and should, report abuse of an elderly person in any of its forms—physical, emotional or financial. Isolation, loneliness and poor health can put elders in a situation of being at greater risk for these scams.

The DCF has really ramped up its focus on fiduciary abuse over the past few years and has a staff auditor dedicated to pursuing financial exploitation of vulnerable citizens with the help of law enforcement.

“It is the responsibility of every Kansan to report suspected abuse,” DCF Secretary Phyllis Gilmore said. “We strive to work closely with law enforcement and other agencies to protect vulnerable adults.”

06/29/2015

Baby boomers are more concerned with funding their retirements than leaving financial inheritances to their families and charities. While this may have been initially driven by the Recession, remember that this generation re-defined everything from music to social mores. The boomers are at it again: redefining what it means to leave a legacy after they are gone.

However, money isn’t the only definition of legacy, according to the US News article titled “How Boomers Are Redefining 'Legacy.'” Baby boomers realize that their top priority is to have enough assets to support themselves, but are starting to redefine “legacy” in the process. For some individuals, it means giving away some money now. For others, it’s restructuring some assets to leave a financial inheritance. For most, the process of aligning their assets with their priorities means the opportunity to create non-financial legacies.

Rethink how you label the financial help you're giving now to your next generation. Are you helping them out with college tuition? Helping with the living expenses of a slow-to-launch millennial by having them stay at home or by covering some bills is not uncommon. About 62% of Americans 50 and older are providing financial support to family members, according to a recent study. The study found that the subsidies averaged $15,000 over five years, but also increased with the givers’ resources. You’re allowed to give away $14,000 per recipient, per year, without triggering any tax penalties or disclosures … more than that and the person who gives has to complete a gift tax return. Also, the gift tax is deducted from your lifetime cap on tax-free gifting.

A 529 college saving plan lets grandparents build up provisions for a grandchild’s college education. Another way to redefine “legacy” is to set up your assets to guarantee that your heirs receive at least some type of asset. Be sure to distinguish legacy planning from estate planning, the article says. For instance, some families construct a legacy of memories and real estate by purchasing a vacation property held in a trust and owned equally by all heirs, keeping it intact for at least another generation. It also guarantees that the vacation home won’t automatically be sold as part of the estate.

Baby boomers: it’s really stories and family values children want from their parents—that’s what Boomers say they want from their aging parents. It’s likely that Generation X and millennials will want the same. Discussions about heirlooms with some market value but even greater sentimental attachment, like grandma’s gold wedding band, are great openings for conversations about “values that characterize the family.”

The article also suggests legacy letters that convey your own priorities, point of view, and life lessons for future generations. This gives you the chance to talk about the document. It’s a good way to redefine “legacy.”

06/26/2015

Most summer plans do not include drafting a will and testament. Mowing a lawn choked with weeds and overgrown with grass is more likely to be tackled than considering your final wishes. According to the American Bar Association, 55 percent of Americans do not have a will or other estate plan in place when they die. A survey by the online legal service Rocket Lawyer shows that families are equally lax in planning: about half of all Americans with children did not have a will in 2014. Families with children should balance summertime fun with the sober but necessary task of preparing an estate plan.

The Denver Post says that the consequence of that is there's no guarantee who’s going to get your assets. The article, titled “How estate plans protect family assets far better than a will,”also says that you canbe placing your children at risk. They could end up in Child Protective Services or in the custody of someone you wouldn’t dream of parenting your kids.

"If you don't have an estate plan, you have a 'plan' written by the state," the article states. That means that you're relying on the state to decide what happens with your kids and your assets. It means that your family will be required to go through the courts, and probate may take months or even years, according to the American Bar Association. Most states have waiting periods for creditors to respond and during which the probate estate can’t be distributed—and that's only if an individual's affairs are in order. Anything hairy means delays and more work.

Depending on the state, probate can be expensive. In some states it can cost between 5 to 7 percent of your estate. Similarly, an estate planning attorney’s fees sometimes scare folks away. However, completing an estate plan on the web or through a lawyer who charges only a few hundred dollars to set up a basic will often leaves too much to interpretation.

The article advises you to understand how assets are titled and how beneficiaries are designated—the two most critical and least understood concepts in estate planning.

One more benefit to planning your estate with a qualified estate planning attorney versus a do-it-yourself online form is that your attorney will help you update your plans as laws change and keep in touch with you throughout your life. Your online will won’t tell you if you need a change or modification. You should update your estate plan at least every three years or when you experience a big life event, like a death, birth, marriage, or divorce.

As you live your life, make sure your estate plan reflects the needs and wants of your family.

06/25/2015

Most people's most important asset is their home, and protecting it is always a priority. In your retirement, though, the threat of huge, unexpected medical bills is always present, and expenses like long-term care -- which Medicare and other regular health insurance plans typically don't cover -- can quickly wipe out your assets. To protect your home, some advisors recommend using what's known as a life estate.

A life estate gives an individual the right to a home or other real property throughout that person's life. The life estate holder can live in the home, rent it out and keep the proceeds. The life estate holder has to pay the ordinary costs of maintaining the home, like property taxes. When the life estate holder dies, the property then goes to the holder of the remainder interest, who automatically receives full legal title and possession of the property without going through probate.

The article explains that to create a life estate, the owner of the property can execute a deed that retains a life estate interest but gives the remainder interest to another person or group. Many use a life estate to safeguard the family home from creditors, especially Medicaid. The rules of Medicaid don’t require you to sell the family home, but Medicaid puts a lien on the home. After the original owner dies, Medicaid is entitled to collect against that lien, forcing the sale of the home if necessary in order to collect that money. But if you create the life estate at least five years beforehand, Medicaid's anti-transfer rules typically don’t apply.

However, life estates do present some challenges, such as the fact that the creation of the life estate is treated as a gift to the remainder interest holder, which may mean gift tax liability. Also, the life estate holder can't sell the property without the permission of the holders of the remainder interest. The proceeds of a sale have to be divided according to the relative value of the life estate and remainder interests.

Legal concepts like life estates can be difficult to understand. Talk to an estate planning attorney about this way to preserve a family home. A life estate may not make sense for everyone, but they can be useful in the right situations for those who understand all of the factors involved.

06/24/2015

Choosing the right trustee is vital to ensuring that your beneficiaries enjoy the legacy you intend to leave behind. Rick Friedman, senior vice president and financial advisor at RBC Wealth Management, offers some important considerations.

A trustee is the individual or company that administers a trust for the benefit of named beneficiaries. Duties can range widely and may include paying bills and taxes, and managing property and investments. Most importantly, the article says a trustee “has a legal fiduciary duty to manage a trust on a beneficiary’s behalf,” by always acting in the beneficiary’s best interests, as outlined by the trust.

The trustee’s job isn’t easy nor quick. Overseeing a trust could mean years of active engagement with the estate’s beneficiaries. For this reason, the article emphasizes that it’s essential to think about the most appropriate trustee before making the appointment.

A trustee doesn’t need a lot of legal or financial knowledge, but needs to be someone you trust implicitly. In addition, close proximity to the beneficiaries is important so that duties can be performed quickly and without undue travel expense. Above all, it should be someone who has the energy and mental acuity to take on all responsibilities.

Managing a trust is a big responsibility and requires a candid conversation with the potential trustee. A trustee needs to know up front what is being asked of him or her. The article also emphasizes the importance of periodically re-evaluating your trustee choice as circumstances can change. Have you and this friend grown apart or now is your parent is too old to help? If yes, it’s time to consider a new trustee.

Another option is a trust company. A trust company will be unemotional and completely detached from the situation. “There are definitely fewer family feuds when trust companies are involved,” the article says. Trust companies can also bring expertise and experience that a non-professional trustee can rarely match. The potential downside to hiring a company is that trust companies charge a fee. This can vary, but is usually a percentage of the estate. A friend or family trustee will usually not charge for their services.

Finally, the article emphasizes the importance of having language in your will that allows you to assign new trustees if circumstances change. To do this you will need flexibility in your trust language.

An experienced estate planning attorney can help you through this process.

06/23/2015

There's more to relocating in retirement than picking a warm spot and enjoying the future days of leisure. Before making your decision, you'll need to take into account all aspects of your financial life, ranging from your monthly income to your estate plan.

Should I downsize?This depends on how many visitors you plan to have and how often. If you're moving far away from family, you may not expect many visits. Also, if you sell your home and buy a less-expensive home, you will probably be able to add the difference (minus fees and other expenses) to your retirement fund.

What's the cost of living at the new location? You have to consider the total cost of living, which goes beyond taxes and includes expenses such as health care, food, and transportation. While real estate prices in popular "glamor" cities like New York and LA are usually higher than smaller cities or college towns, it's your total outlay that counts: you may be able to live in a smaller space in a big city and save money on downsizing. Look at all of the expenses.

How will relocating impact my cash flow in retirement? The article says to remember that it's what you keep after taxes and inflation that counts. Look at state income tax rates because there are a few states that don't have any income tax. These include Alaska, Florida, Nevada, South Dakota, Texas, and Wyoming. But if you examine the tax practices of other states, you'll find variations. To understand the total impact relocating will have on your after-tax cash flow in each place you're considering, work with your estate planning attorney.

Are there going to be estate-planning concerns? Relocating and establishing residency in a new state means new laws. Speak with your estate-planning attorney before you make this relocation decision to see if your estate would be subject to higher taxes and/or greater restrictions in a new location. Does the new state have an inheritance tax? How will the state value your assets? Will your surviving spouse be shielded from taxes? All great questions for your meeting with your estate planning attorney.

Will relocating improve my quality of life? So, will you be able to maintain or enhance your quality of life if you relocate? Will you be happy living farther away from your friends and family? That’s the big question.

Ultimately, the article says the decision to relocate really comes down to whether you can afford it and whether it will make you happier.

06/22/2015

Maybe you have seen those will-in-a-box kits. Maybe you have even considered picking one up. Think twice about that. While you can draft a will on your own, there are plenty of reasons why you may not want to go that route. Most people do it to save money, but they may overlook or forget to take care of some important details – details that may eventually cost them much more than the amount they could save.

State law differences. Many online wills and trusts don’t apply state laws, just basic concepts. An estate planning attorney knows these state laws and can make sure your will or trust is legal.

Super software. There is some software and online forms that can help you draft a will, but there’s no guarantee the technology will ask specific, unique questions that an estate planning attorney might ask about your estate.

Earlier wills. Most wills have boilerplate language that will revoke a preceding will. If you write your will totally on your own, you may not realize that you need this clause.

Assumptions. What if you will property to your child and you outlive her? What if you will an asset to a friend, and that asset is gone when your will is executed? Things to think about that most people writing a will haven’t considered.

Vagueness. Sometimes executors aren’t given enough power by the language of a will.

Wills, trusts and estate plans should be crafted with the help of an estate planning attorney. Don’t try this at home all alone!

06/19/2015

The voice on the other end of the phone line sounds sweet and concerned. There has been some trouble, so he or she wanted to reach out to your beloved grandparents. Junior, who has been traveling, needs some cash fast. Maybe there was a police incident or fender bender. What a good pal! And a friend indeed, because the caller knows things like what sports teams your grandkid roots for, where he goes to school and what bands he listens to. Grandma and Grandpa are happy to send some money via a wire transfer, a bank routing number or a prepaid money card. And of course, they'll keep it a secret from Mom and Dad, who would just overreact. Once the cash is handed over, the truth comes out: The whole thing was a con.

A recent article from the Detroit Free Press tells us that in many instances, the victims don't see their money again, particular when it’s a wire transfer. The article, titled “Loving grandparents target of latest 'send money' scheme,”says that some Michigan grandparents were out $33,000 after being told their grandson was caught fishing without a license in Canada and had drugs and alcohol on his boat. This happens quite often, and many grandparents might be too embarrassed or scared to report it to relatives or police.

The National Council on Aging says that this Grandparent Scam is one of the top 10 cons targeting seniors. The FBI cautions grandparents to resist the urge to act quickly. Make sure you confirm the caller's story, as well as the grandchild's travel schedule.

The article explains that real selling point in this scam is the personal information fraudsters retrieve from Internet and social media that convince seniors that the caller knows their grandchild. Combine this with the fact that grandparents love their grandchildren and are eager to help them out.

The scam is kicking into high gear now that we’re in the summer travel season. The article warns that the scam can also come in various forms: like the caller posing as the grandchild, as a police officer, or as a lawyer. The call often comes late at night, waking grandparents and catching them off-guard. In other instances, scammers reach out via e-mail.

Grandchildren can do their part by educating grandparents about social media and all of seemingly "private" info anyone can find out about you; telling your grandparents about your travel schedule; and making an emergency contact plan (like who you would call first if something happened while you were away or choose a code word to use to prove that the caller is really your friend). And grandparents should remember the following:

Be suspicious if the caller doesn't use your grandchild's name, instead saying, for example, "I'm Nancy, your granddaughter’s friend." They likely are waiting for you to fill the blanks with a reply, like "You mean Lisa?”

Test the caller by asking a question only your grandchild would know;

Pay attention to the caller's voice and words, if he or she claims to be your grandchild. Does it really sound like your grandchild?

Don't react immediately;

Beware of phone calls in the middle of the night or ones in which you're asked not to tell the grandchild's parents about this;

Double-check all information the caller gives you. Contact the parents or other relatives, even if the caller asks you to keep it a secret;

Don't use a wire transfer, because if it's a scam, you won't be able to get it back; and

06/12/2015

It's the quirky Christmases Catherine Falk remembers the most. "To us, he wasn't 'Columbo.' He was dad," she told FoxNews.com of her famous father Peter Falk. "He wasn't in character. He was the character. He was genuinely this bumbling, goofy, absent-minded guy who was so funny and loved his family," Catherine Falk, remembered with a laugh. "We'd give him these Christmas presents and he'd put them in his trunk and forget about them. Then the next Christmas would come around and he'd open the trunk of his Mercedes and there they'd be, all the present from last year." The all-around funny family man would go on to create many happy memories with those closest to him. But when he got sick, things got complicated. His children accused his wife of alienating him. They said they weren't allowed to talk to or see him and were denied any information about his health. It's a case that's being played out in thousands of households in America.

In Falk’s case, she and her stepmother were locked in a court battle over conservatorship and access to Peter for years. In 2008, he became completely incapacitated from his advanced dementia. Catherine then decided to create the Catherine Falk Organization, which advocates for the rights of adult children to see their sick parents.

Catherine was able to get an order for visitation from a court that was made at the complete discretion of the judge. Conservators in California currently don’t have to inform family members on the health, hospitalization or death of a relative. Part of the problem, California Assemblyman Mike Gatto said is the frequent tension between the second or third spouse and the children of the first marriage. That conflict often gets worse when a parent becomes sick. (Remember Casey Kasem?)

Current California law gives the rights relating to the care of loved ones to the spouse. Children have no legal way to arrange visitation with their ailing parents, to receive notice of hospitalization or even the death of their mom or dad. Children also have no access to information on the funeral arrangements.

Gatto’s bill, if passed, seeks to reverse the law and create a new legal process for adult children to ask the court to visit a parent under care who is not in a conservatorship. The Assemblyman thinks it will pass and hopes this law will be a blueprint for other states considering similar measures to help ailing seniors.

Contact an experienced elder law attorney who can help make arrangements to keep the family peace should that time come for your family.

06/11/2015

A bar owner who never attended college has left $200,000 to the alma mater of her best customers. Ida F. Meyer of Lake Placid, Fla., died March 22 at 103 years of age. Ida and her husband Casper (nicknamed “Cabbie”) opened Cabbie’s Tap on Main Street in Ashland in 1953 and ran it for a decade. Cabbie's is still there but has been renamed Stagecoach Inn. Ida's attorney faxed a letter to Northland College in Ashland in late April informing them that Ida had named the College as her residuary beneficiary, an amount totaling about $200,000.

“I might as well give it back to the College,” she told her attorney Michael A. Rider, during her estate planning. “Those kids were good to us.”

A Northland News article, “Former bar owner bequests $200,000 to Northland College,”reported how students from that era remember a fastidious, kind couple who didn’t tolerate loud or obnoxious behavior. They ate foot-long hotdogs and brick cheese sandwiches on rye bread, and drank dime taps. They played hits on the jukebox.

Cabbie’s is credited with many chance meetings, first dates and long-lasting marriages. “I met my sweet wife of 48 years in the fall of 1964 on a Friday night at Cabbie’s,” said Northland College alumnus Tom Bogess in the article.

“I bought her a beer, we danced and the rest is history.”

Ida was born in North Dakota and she married Casper Meyer in 1935. They owned several Wisconsin businesses, including Cabbie’s Tap. Casper died in 1991 and Ida moved to Florida. Neither she nor her husband attended college, and they never had children of their own. Northland College says that it has started the Ida and Cabbie's Scholarship in honor of Ida's generous gift.

An estate planning attorney can help you leave property or a gift to your favorite school or charity.